Tim Hughes puts the boot into the highs and lows of the online travel business (with an Australasian/Asian bias) with some blogging about consuming and loving travel thrown in.

Tuesday, May 15, 2007

Hey - where did PriceGrabber Travel go and what does mean for the meta-search market?

Reader - Greg Morris - sent me a tip that shopping comparison site PriceGrabber.com has (with not a hint or announcement) shut down their travel comparison section.

PriceGrabber is a serious player in the comparison shopping game. According to Paid Content, they were founded in the boom (1999) and sold for US$485mm in Dec 2005 to Experian (no not Expedia, Experian). They are in the top leagues with (then) $60mm in revenues and (now) 11,000 merchants. Here is an Experian power point deck (in pdf form) if you want to know more.

Suddenly there is no reference to travel anywhere on the PriceGrabber site.

Three possibilities that I can think would cause this:

Execution - That PriceGrabber were simply no good at executing travel. It is clear they do comparison shopping well and Greg assures me (and Gridskipper agreed) that the engine was a good one. But maybe they were no good at marketing or promotion of this particular product. No way to know;

Brand - Could be that no matter how good you are at comparison shopping for "regular stuff" - electronics, clothing, music, books etc - the purchase of travel is too different a form of consumer behaviour to operate under the same brand. We know that Amazon's early efforts in online travel were a failure. We also know that large scale department store retailers have never been successful when trying travel. So maybe the brand of PriceGrabber just did not extend in the mind of consumers to travel; or

Meta-search is tough - I like the concept of the the meta-search model and there are rumours of profits at Sidestep and Kayak but it is way too early to call this a proven market and model. At the core it about traffic arbitrage - buying in traffic at a cheaper rate than advertisers will pay for referrals. There is plenty of room for error in execution but also the potential that there is not a wide enough natural gap between the untargeted search costs of Google and the targeted charges that meta-search needs to levy to survive. I don't believe that- I think the model should and will work but if a big brand and company like PriceGrabber can't do it, we need to stop and think about the market as a whole.

Most likely not one cause but all three. I don't think it should scare off people from investing in or using meta-search nor entrepreneurs from continuing to believe in their meta-search products but it does remind that brand selection, support and execution focus are critical.

5 comments:

Anon - you have to tell us more. Email me at timsboot [at] gmail [dot] com or put more in this comment section on what happened. Particularly you thoughts on whether this was about Brand, Execution or the Market itself. Will keep all your comments confidential

Will OTA or airlines participate in the meta search war itself ? By all mean, signing up with travel search will put your brand or price into a war more directly. How meta seach company able to help those weaker OTA by using meta search (by not paying more)? Those lowest price will always above......

As a former PriceGrabber.com Travel employee, I can't say they turned over staff that much. In the 2 or 3 years of the travel portal, only 2 people quit. The company, culture, benefits and people I worked with were all wonderful. I think, however, they needed to spend more money on outreach to partners/business development, and add a few more more programmers. I feel like the owners/upper management were unwilling to put forth the resources to make it happen quickly, or unwilling to support it for the amount of time it would take for the limited resources alloted to make the site successful. That said, they are really good and have had so much success with comparison shopping, I guess they didn't feel like supporting a money loosing department. I think it was more a matter of will than ability or resources.

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